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Andrew Greenland presents at National Bureau of Economic Research Summer Institute

The economics professor discussed using equity market reactions to infer exposure to trade liberalization.

Andrew Greenland, assistant professor of economics in the Martha and Spencer Love School of Business, shared research on trade liberalization at the 2019 National Bureau of Economic Research (NBER) Summer Institute, held July 8-11 in Cambridge, Massachusetts.

Greenland presented the paper, “Using Equity Market Reactions to Infer Exposure to Trade Liberalization,” which proposes the use of equity market reactions as a means to quantify the distributional implications of newly implemented economic policies.

Greenland and co-authors Mihai Ion, University of Arizona, John W. Lopresti, College of William & Mary, and Peter K. Schott, Yale University and NBER, analyzed the consequences of the U.S. granting Permanent Normal Trade Relations to China in 2000. The important policy shift was a pre-cursor to China entering the world trade organization in 2001, the authors wrote.

“We show that equity market reactions to the news that the policy was going to be implemented not only reflect these complicated channels of exposure, but also that they are very useful for explaining the relative growth among firms following the policy's implementation-- that is, they help identify the ‘winners’ and ’losers’ of policy changes,” the authors said. “In the case of China's WTO entrance we find that in the U.S. the largest firms gain more than enough in profits to offset the losses among the smaller firms, but since these big firms are more productive (less labor is used to make each dollar in profit) when they grow they do not hire all of the workers that are displaced from the smaller firms, who tended not to benefit as much as the larger firms.”

The NBER, the nation's leading nonprofit economic research organization, is dedicated to conducting economic research and to disseminating research findings among academics, public policy makers and business professionals.

The Summer Institute was attended by NBER members and presenters from institutions including Duke University, University of California at Berkley, University of Chicago, University of Southern California, MIT, Bank of Italy, Brown University, University College London, Yale University, Princeton University, and Dartmouth College.

Greenland joined Elon's faculty in 2013 after receiving his doctorate from Purdue University. His research focuses on international economics.

nfilippo,
Staff
8/5/2019 3:45 PM